Jobs Fund Commits R271 Million – For What?

Jobs Fund and partners commit R271 million through COVID-19 support intervention

South Africa’s latest official unemployment rate of 30.1% means that approximately 7.1 million people where unemployed during the first quarter of 2020, a number that rises to 10.8 million when including those that have given up the search for employment. With lockdown restrictions having commenced at the end of the quarter, this number does not reflect what is certainly going to be a new record in the second quarter of the year.

There is little doubt that social and economic pain will be an inevitable outcome of the coronavirus outbreak but the scale and depth remain unknown. What we do know is that the issue of jobs, particularly youth unemployment (41.8%), will be one of the greater challenges resulting from this crisis.

COVID induced constraints on economic activity has resulted in an unprecedented number of closures of small and medium enterprises (SMEs) and hardships placed on smallholder farmers there has also been massive job losses across many economic sectors.

Although government has taken extraordinary measures to protect the economy – amongst which include the introduction of financial support packages for businesses more needs to be done. The Jobs Fund has identified a funding gap affecting a number of its projects and has responded to protect the viability of its portfolio of job creation projects. The intervention aims to mitigate both the demand and supply-side disruptions that the pandemic has on its projects, increasing their resilience and bolstering their ability to deliver on their job creation mandates during and post COVID.

The Jobs Fund’s support intervention is focused on addressing supply and demand side shocks by:

  • Augmenting Jobs Fund Partners’ and beneficiaries’ working capital requirements;
  • De risking investment by traditional banking sources of finance into job creation projects;
  • Supporting on-going skills development for youth and SMEs;
  • Supporting project partners and beneficiaries to comply with existing loan repayments and other covenants.

“The R271 million relief funding committed by the Jobs Fund and its partners to 23 projects ranges from support to micro-enterprises and small scale farmers to supporting youth to improve their capabilities and skills and connecting them to the labour market,” says Najwah Allie-Edries, Head of the Jobs Fund.

The intervention will potentially impact more than 70,000 beneficiaries residing in mostly township and rural areas.

The support provided will ensure income protection for vulnerable businesses and individuals. It will also assist SMEs to become more resilient to withstand future shocks.

“Despite the unprecedented challenge we face, the Jobs Fund and its partners remain committed to meeting its job creation objectives and obligations,” concludes Allie-Edries.